Taking a charge.

• Position: Triad

In the year since Lorillard Inc. bought blu ecigs for $135 million (cover story, March), the Greensboro-based cigarette manufacturer has built the electronic-cigarette brand into a powerhouse with 40% market share. Now rivals Winston-Salem-based Reynolds American Inc. and Richmond, Va.-based Altria Group Inc. are moving quickly to catch up--each suggesting that being first isn't as important as being best.

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On June 6, Reynolds, the second-largest cigarette-maker in the U.S., announced that it would start test-marketing its Vuse e-cigarettes in Colorado in July. (It had been doing limited testing in the Triad.) A week later, Altria--the biggest--said it would begin testing its Mark-Ten e-dg in Indiana this month.

E-cigs don't burn tobacco. Inhaling powers an atomizer that turns nicotine-infused liquid into vapor. They can't yet be marketed as a safer alternative to cigarettes, but smokers can puff away on them in many places where smoking is banned.

While not naming Charlotte-based blu specifically, Reynolds says poor performance among existing brands has left many potential customers unimpressed. "There is strong awareness of the category among adult smokers, and many are trying e-cigarettes, but few adult smokers are switching to them entirely," says Stephanie Cordisco, president of R.J. Reynolds Vapor Co. "That's because the products currently on the market aren't providing everything adult smokers are looking for." Vuse, assembled in Winston-Salem, uses a computer chip that ensures a consistent vapor draw, Reynolds claims...